| It is critical to your business success that you | | | | and even eliminated some. Also, a manufacturing |
| prepare realistic forecasts of your future business | | | | company must have a reliable source of raw |
| performance. You need to forecast your operations | | | | materials, and the future cost of raw materials must |
| for three to five years in order to guide your | | | | be considered.Projected Financial Statement |
| business growth. You will need realistic forecasts to | | | | The pro forma financial statements will include |
| support your business plan if you need a loan or | | | | estimated future sales, expenses, and profits. These |
| investor funds. The elements of and influences on | | | | items need to be broken down in order to be |
| pro forma statements include:Prior Financial | | | | meaningful. The sales estimates should state which |
| Statements | | | | salesperson, which department, or which region will |
| Of course you will have to use previous financial | | | | generate the sales. The estimated expenses must be |
| statements if your business has been operating for | | | | broken down into general and administrative, |
| some time. From your prior financial statements, you | | | | operating expenses, depreciation, and taxes.All of |
| will use sales and revenue levels, business ratios, | | | | your estimates and projections must logically flow |
| average expenses, and any relevant information | | | | from previous years' financial statements. If you are |
| about your accounts receivable or payable. You | | | | a start-up business, you may not have profits for the |
| should expect your prior financial statements to show | | | | first year or two. You should start to show profit by |
| financial improvement for each year of | | | | the third year and your profits should continue to |
| operation.Internal Factors | | | | grow except for occasional large expenses. Your pro |
| That status of your operations is important in | | | | forma statements must include estimates of any |
| preparing pro forma statements and projections. For | | | | large expenses that will affect your profit such as |
| example, you must consider whether your business | | | | relocating, property damage, or a new marketing |
| needs to relocate due to expansion, or your business | | | | campaign. Unless you have a background in |
| needs to buy expensive new equipment to replace | | | | accounting or finance, you will need a professional's |
| older models. You also must consider your | | | | help.Jo Ann Joy, Esq., MBA, CEOThe future of your |
| competition, how you are measuring up to them, and | | | | business starts here!You may contact Jo Ann by |
| whether you need a new marketing plan to be more | | | | phone at (602) 663-7007, by fax at (602) 324-7582, |
| competitive. Also, consider whether your company | | | | by email at joannjoy@Indigo Business Solutions.net, |
| needs additional personnel or additional | | | | and by mail at 2313 East Ocotillo Rd., Phoenix, AZ |
| training.External Factors | | | | 85016. Copies of any articles will be provided free of |
| The status of the country's economy is very | | | | charge.For more information about these and other |
| relevant to your company's future. Certain businesses | | | | important legal and business topics, and for free |
| may be affected by the status of the global | | | | articles, please visit our website at Copyright 2006. All |
| economy. It is important to understand the industry | | | | rights reserved. Indigo Business Solutions is a |
| trends to be certain that your product or services will | | | | registered trade name.Discover the secrets to |
| continue to be marketable. The amazing pace of | | | | success. |
| technological growth has changed many businesses | | | | |